Federal prosecutors have opened a criminal investigation into Jerome Powell, the powerful chair of the Federal Reserve.
The investigation plunges the nation’s central bank into a political and legal firestorm, dramatically escalating President Donald Trump‘s long-simmering war with the man who controls US interest rates.
According to officials briefed on the matter, the US Attorney’s Office for the District of Columbia is examining whether Powell misled Congress about the scope and cost of a multibillion-dollar renovation of the Fed’s Washington headquarters.
The inquiry was approved in November by Jeanine Pirro, a longtime Trump ally appointed to lead the office last year.
The investigation focuses on Powell’s congressional testimony, internal records, and spending tied to a sweeping overhaul of the Federal Reserve’s historic buildings near the National Mall – an ambitious project that has ballooned hundreds of millions of dollars over budget.
The move represents the most serious legal threat Powell has faced since becoming Fed chair and places the independence of the central bank squarely in the political crosshairs.
Trump has repeatedly attacked Powell for refusing to sharply cut interest rates, publicly floating his removal and accusing him of ‘incompetence.’
Trump has also suggested legal action over the renovation project, which is now estimated to cost roughly $2.5 billion.
Federal prosecutors have opened a criminal investigation into Jerome Powell, the powerful chair of the Federal Reserve
Trump has repeatedly attacked Powell for refusing to sharply cut interest rates, publicly floating his removal and accusing him of ‘incompetence’
The US Attorney’s Office for the District of Columbia is examining whether Powell misled Congressabout the scope and cost of a multibillion-dollar renovation of the Fed’s Washington headquarters. The pair are pictured in July touring the Federal Reserve
In a rare and unusually defiant video message released on Sunday night, Powell called the investigation ‘unprecedented’ and directly challenged its legitimacy.
‘This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,’ Powell said.
‘It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts.’
Powell went further, warning that the criminal probe strikes at the heart of the Fed’s autonomy.
‘The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,’ he said.
‘This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.’